Alazopeptin i.e. L-alanyl-(6-diazo-5-oxo)-L-norleucyl-(6-diazo-5-oxo)-L-norleucine is a known antibiotic having an inhibitory activity against animal tumors such as leukemia L-1210, Sarcoma-180 and Hela cells, and can be produced by fermentation of a microorganism belonging to Streptomyces. Alazopeptin has the molecular formula of C.sub.15 H.sub.21 N.sub.7 O.sub.6 and the molecular weight of 413 and is believed to be a peptide consisting of one mole of alpha-alanine and two moles of a C.sub.6 diazo keto amino acid. Preferable strains are exemplified by Streptomyces griseoplanus as reported by De Voe et al [Antibiotic Annual, 7, page 730 (1956)] and Streptomyces candidus var. azaticus by some of the present inventors and their partners [J. Antibiotics, 26, pages 181-183 (1973)]. It has now unexpectedly been discovered that a new substance which exhibits inhibitory activities against animal tumors such as leukemia L-1210, Sarcoma-180 and Hela cells and gram-positive bacteria can be obtained by culturing a microorganism belonging to Streptomyces candidus var. azaticus.